November 08, 2010

Treasury Needs Plan to Recoup GM Investment

Sen. Charles Grassley, R-Iowa, the ranking member of the Senate Finance Committee, commented on the terms of General Motor’s initial public offering of stock that were made public. Grassley is concerned about whether taxpayers will be repaid for rescuing the automaker. He noted, “The inspector general confirmed for me weeks ago that the GM initial public offering would need to clear a high bar to repay taxpayers. The inspector general said GM stock would need to sell for an average of $133.78 a share to fully recoup the tax dollars spent to rescue the automaker. The highest share price the former GM ever reached was $94.63 in 2000. Today’s filing says at least 365 million shares will be offered at a projected $26 to $29 each. Short of a miracle, the initial public offering won’t repay the taxpayers. The onus is on the Treasury Department to come up with a plan to make sure taxpayers get their money in full.”